National security. Berlin is reportedly preparing to block a second German chip firm from falling into the hands of a Chinese owner
The German government is reportedly going to block a Chinese takeover of a German chip firm – the second such potential block in the space of a week.
The firm in question is Munich-based ERS Electronic, which is a manufacturer of thermal management solutions for the semiconductor industry.
The Handelsblatt newspaper on Wednesday, which cited government sources, noted Berlin’s block on the Chinese takeover of ERS is down to security concerns, Reuters reported.
ERS Electronic declined comment on the matter, Reuters reported.
And at the time of writing, it is unclear which Chinese company (or Chinese-owned venture) is seeking to purchase the small German firm.
But it comes at a time when tensions between Germany and China have been growing.
Reuters noted that German Chancellor Olaf Scholz had last week visited Beijing, where it was clear that China and Germany were no friends of ‘decoupling’.
That said Scholz reportedly complained about increased difficulties for German companies accessing the Chinese market.
Then earlier this week it was revealed that the German economics ministry is likely to block the acquisition of automotive chip supplier Elmos Semiconductor.
Elmos was potentially going to be sold rival Silex – a Swedish company that is a subsidiary of Chinese group Sai Microelectronics.
But it was widely reported that the German government will likely block the Chinese takeover of Elmos’ chip factory on security grounds.
US export controls
The German case involving Elmos seems to mirror a UK case, where the British government has repeatedly delayed its national security decision whether to allow a Chinese-owned entity (Dutch chip firm Nexperia) to acquire Newport Wafer Fab, the UK’s largest largest chip producer.
Germany of course is also in the position of having to comply with strict US chip export controls to China.
These US export restrictions has resulted in the decline of imports of semiconductors into China.
Although Nvidia this week revealed it is able to get around the US export restrictions by shipping a slower chip to China.
It should be remembered the US recently instructed both Nvidia and AMD to stop selling some of their AI-related technology to China.